Life Insurance Corporation makes open offer to acquire 26% stake in IDBI Bank

New Delhi: State-owned IDBI Bank on Tuesday said it has received final letter from Life Insurance Corporation (LIC) for an open offer to acquire additional 26 percent in the lender.

"This is to inform that IDBI Bank is in receipt of final letter of open offer from LIC vide letter dated 18 December 2018 for acquisition of 2,04,15,12,929 fully paid-up equity shares representing 26 percent of the fully diluted voting equity share capital of IDBI Bank from the equity shareholders of IDBI Bank," the lender said in a regulatory filing.

The open offer has been made at a price of Rs 61.73 a share, which is in connection with LIC's acquisition of 51 percent controlling stake in IDBI Bank.

Representational image. Reuters.

"The acquirer (LIC) shall complete all procedures relating to the offer within 10 working days from the date of closure of the tendering period, including payment of consideration to those equity shareholders whose share certificates and/or other documents are found valid and in order and are accepted for acquisition by the acquirer," LIC said in the open offer which was enclosed in the regulatory filing by the bank.

An open offer is mandatory pursuant to Sebi regulations as it gives an exit route to shareholders, including retailers, to monetise their holding in a company.

"The acquirer is making the offer to acquire offer shares (2,04,15,12,929 equity shares constituting 26 per cent of the fully diluted voting share capital of the target company i.e., IDBI Bank) at the offer price (Rs 61.73) per offer share, which is equal to the price determined in accordance with offer consideration (Rs 1,26,02,25,93,107)," LIC said in the letter.

However, IDBI Bank is in receipt of a letter dated 3 December 2018 issued by the government whereby it has confirmed that it (government) will not participate in the offer, LIC said.